Austrian hydro producer VERBUND reported its financial year 2020 results were “very encouraging in spite of the COVID-19 crisis,” with shares trading 56.1% higher and EBIDTA increasing by 9.2%.
VERBUND says these results “demonstrate that our sustainable business model works well even in times of crisis and that the Group has considerable strategic flexibility and resilience to external influences. As a supplier of electricity generated almost exclusively from renewable sources of energy, we are ideally positioned to navigate a decarbonized, decentralized and digitalized energy future.”
In 2020, the COVID-19 crisis led to a rapid deterioration of the overall energy market in which VERBUND operates. Wholesale electricity prices fell due to lower electricity demand, an excess supply of CO2 emission rights and a drop in prices for coal, gas and oil. The energy market environment started to improve again from mid-2020. Wholesale prices for electricity recovered, and prices for coal, gas and CO2 emission rights began to stabilize again mid-year.
VERBUND shares finished the year trading 56.1% higher and thus significantly outperformed the ATX and the STOXX Europe 600 Utilities. Its market capitalization of €24.3billion as of Dec. 31, 2020, made VERBUND the highest-valued company on the Vienna Stock Exchange. Rating agencies S&P and Moody’s confirmed VERBUND AG’s good rating with “A/stable outlook” and “A3/stable outlook,” respectively.
For financial year 2020, EBITDA increased by 9.2% to €1,292.8 million. The Group result rose by 13.8% to €631.4 million compared with the previous year. At 1.01, the hydro coefficient for the run-of-river power plants was on a level with the previous year and 1 percentage point above the long-term average. Generation from VERBUND’s annual storage power plants increased by as much as 14.8% in 2020. Generation from hydropower therefore increased by 864 GWh compared with the previous reporting period.
The rise in wholesale electricity prices on the futures markets during the relevant hedging period also had a positive effect on earnings. By contrast, prices on the spot markets declined significantly in 2020, due in particular to the effects of the COVID-19 crisis. As a consequence, the average sales prices obtained for VERBUND’s generation from hydropower increased by €5.6/MWh, to €44.6/MWh. The EBITDA contribution from the Hydro segment thus rose significantly. The EBITDA contribution from the Sales segment also increased, while the contributions from the New renewables, Grid and All other segments decreased.
Based on expectations of average levels of generation from hydropower and wind power and the opportunities and risks identified, VERBUND expects EBITDA of about €1,080 million to €1,300 million and a Group result of about €450 million and €590 million in financial year 2021.
VERBUND is one of the largest producers of electricity from hydropower in Europe. Close to 100% of its electricity generation comes from climate friendly, renewable hydropower.